> If you are not VAT registered then you don’t need to collect or pay VAT.
That’s not true. I mean,you have to register for VAT if you’re selling to EU customers.
I’m actually looking right now into selling in Google Play but it’s really a mess if you want to sell in Europe (and your business is not in EC).
Basically what I’ve found is: if you’re a non-EC business selling to EC customers (B2C), you are required to collect VAT for the Member State where the customer belongs.
This means that non-EC businesses have to register separately and account for VAT in each and every Member State.
For example, a Canadian business with customers in the UK, France and Spain would have to register in, and submit declarations to each of those Member States.
However, as an alternative, you have the option of registering electronically in a SINGLE Member State of your choice and accounting for VAT on your sales of electronically supplied services (apps) to all EC consumers on a single quarterly on-line VAT declaration which provide details of VAT due in each Member State.
For example, a US business register in the UK, its customers are in UK, Germany and Italy. The US business charge UK VAT to UK customers, German VAT to german customers and Italian VAT to Italian Customers.
Then, the business enters the VAT for each member state on the appropriate lines of the electronic declaration and send the payment to the UK tax agency (the UK tax agency then give the collected VAT to the other countries authorities).
I’m not making this up, you can check here: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document#P1141_145418
So, it’s like that. You’re expected to register in a EU country and collect and submit VAT per each country in the EU, according to your sales per country.
But is it really necessary if my sales are very small? Is there a threshold right? I really hoped under a certain threshold it would be ok to don’t collect and submit VAT… but unfortunately I was wrong… The UK HMRC is also answering to this question:
Q: “20.13 My sales of electronic services to EC consumers are small. Do I need to register for the special scheme?”
A:“There is no threshold for registration under the special scheme. Although your sales of electronically supplied services to EC consumers may be small or even occasional, the special scheme enables you to register, submit declarations and pay VAT in the single EC Member State of your choice. If you choose not to register under the special scheme, the normal rules (including VAT registration thresholds) will apply. In contrast to the special scheme, these may require you to register and account for VAT in most Member States where your customers belong.”
(http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document#P1182_151797)
I would like to start selling Android apps in the EU, but I’m still thinking if it’s worth it or not.
I mean, I’m required to add VAT to my apps per country, collect the VAT. Then every 4 months I have to calculate the VAT for each EU country, submit the VAT online and send the payment to the VAT authorities in the EU country.
You’re not really “losing money”, since VAT is a value added tax, so if you set the price of your app to “X”, it’s going to cost “X”+“V” (V= VAT) in a EU country, and then you’re paying the EU only that “V”… But still, I hate this accounting stuff! 
Note: I’m not an accountant or a lawyer, so can’t tell you if it’s exactly correct. But I’m pretty sure the “you don’t need to collect VAT if you’re outside EU” it’s not correct.
Here’s everything on the subject:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_029955&propertyType=document
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